Determining the Value and ROI of an Enterprise Portal, Part 2
We examine how to value a portal investment, examining both the tangible and "soft" benefits of the technology. We'll also look at the buy-versus-build debate, and factors to consider in determining a portal's ROI.
- By Ken Bisconti
As we discussed last week, portals provide the user with a single point of access to a wide variety of information and services throughout the enterprise. A portal can deliver not only integrated content and applications, but also a unified, collaborative workplace. Indeed, experts agree that portals are the next-generation desktop, delivering e-business applications over the Web to all types of client devices.
Portal acquisition and adoption currently rank at the top of CIO priorities. The greater business value and return on investment from a portal comes from the higher-order capabilities of collaboration and business process integration within the portal and across the organization.
Initially, portals provided a centralized access point for enterprise-related functions such as e-mail, company information, workgroup systems, and commonly used business applications. However, modern portals have evolved to do much more.
Portals today offer valuable capabilities such as security, search, collaboration, and workflow. A well-designed portal provides a common user interface and a content base that can be integrated and leveraged across all portal applications (for example, portlets), to deliver a unified, collaborative workplace. Undeniably, next-generation portals deliver on-demand business applications to client devices, allowing users to customize individual interfaces.
Additionally, a successful portal leverages middleware to integrate and simplify content, applications, business processes, and collaboration tools in an open development environment.
Hard Facts and Soft Results
When valuing your portal investment, consider both the hard, tangible benefits as well as the necessary as well as the often "softer" benefits that can’t be measured by success formulas.
The more tangible benefits of the portal involve cost savings associated with consolidation, targeted deployments, self-service capabilities, and the integration of business processes.
The softer benefits come from streamlining communications and access to information, the value of a single user interface and single sign on, the easy-to-view presentation layer unique to each user, the overall usage and user satisfaction, and the ubiquitous (yet customized) access to information.
Additionally, the most fundamental business case for enterprise portals should be made from both an internal and external perspective. Essentially, the internal payoff must result in increased productivity, while the external value is determined by revenue generation.
For example, high-end door and window manufacturer Jeld-Wen wanted to improve communications while also enhancing productivity. With a focus on becoming more responsive to managers by providing quick access to the tools and information needed to smoothly conduct business operations, the company deployed an enterprise portal that acts as a centralized point of access to relevant business content, enabling managers to work more productively. Today, Jeld-Wen’s managers leverage the new intranet and save a significant number of hours previously spent searching for information. Additionally, IT staff receive fewer trouble calls, enabling them to focus on higher-value projects, while the portal coordinator’s productivity has improved by 10 percent.
Another example of the value of portals can be found at Republic Indemnity, a worker’s compensation insurance specialist. Its portal addresses three unique audiences: customers, employees, and insurance agents. By providing a customized experience and true self-service capabilities, the organization has saved more than 500 hours previously spent on troubleshooting and coding. This, in turn, increases productivity along with customer and partner satisfaction.
Buy Versus Build
As I discussed last week, a combination of factors determine the value of an enterprise portal. One area that continues to be a source of debate is the buy-versus-build scenario.
When portal decision makers are ready to decide whether to invest in a commercial off-the-shelf portal infrastructure, or to build their own, they must weigh many factors, including development efforts, the pros and cons of each approach, an enterprise's own development and deployment environments, the skills and experiences of its development teams, industry standards, and its unique business requirements.
Sometimes, an enterprise may only want to experiment with portal technology so it considers first buying a "basic" package for a Phase 1 project that offers only application and/or content delivery. In a later phase, the enterprise can attempt something that appears more "complex," such as integrating people and business processes.
Unfortunately, experience has shown this approach has significant limitations when trying to make a business case for a project or calculate the ROI. By only enabling lower-order capabilities such as application or content access, organizations generally fail to show meaningful ROI (because nothing has been transformed in the business processes), inhibiting the project from getting beyond the basic capabilities of Phase 1.
Business-integration experts today proffer an interesting approach to going beyond Phase 1 by first recognizing the complexity and existing investment in all manner of core business applications. Both IT and business leaders should acknowledge and appreciate the realities and leverage a portal solution to integrate into the user interface only the specific underlying systems functions required to perform the business process.
In effect, the portal process integration becomes the glue that holds the business process together for the user and enables the user to execute a process across systems. The key to success is found in the depth of portal business process integration capabilities that allow an organization to progress from simple integration to a fully transformed on-demand business model.
An enterprise that leverages the enterprise portal to respond to business processes—those that are integrated end-to-end across the company and with key partners, suppliers, and customers—is better equipped to respond with flexibility and speed to any customer demand, market opportunity, or external threat. In most cases, achieving this is by way of a platform portal that integrates content, applications, and tools.
With the right approach, it doesn’t take long for the portal to capture a steady user base. However, a word of caution is in order about portals that claim to be comprehensive and can be instantly deployed overnight. They typically offer lower functionality and can take longer (over months and years) until they catch up with the portal evolution. Of course, this is also assuming it will continue to have a focused audience of users who start and end their day with the portal.
Determining Portal ROI
True on demand workplaces are solutions that provide a high level of financial payback. Technology analysts report the market’s desire today to purchase a portal solution with rich, comprehensive, embedded functionality. This need is driven by the business requirement to achieve ROI in months, not years, through having a rapidly deployable set of business relevant capabilities.
To achieve ROI from a portal solution, the approach must focus on both business and technology factors, including:
- Improved user ability to access all the resources (applications, information, and people) required to deliver key business processes
- Streamlined, lower-cost delivery of business processes both inside and outside the firewall
- Help for people to work together more effectively across geographies to gain operational efficiencies
- Embedded training within business processes to keep skills current and ensure organizational compliance
- Reduced costs and increased revenues resulting in ROI that’s derived in months, not years
- Increased user satisfaction that also accommodates customers and partners
- Transformation of the organization by streamlining access to information and automating tasks such as travel requests or ordering office supplies; all to maximize productivity
- Architecture that supports continued growth and proliferation of the portal throughout the organization in a streamlined manner
- Simplified purchase, use, and deployment of technology
- Build versus buy: understand your limitations and define your resources before choosing an option
- Open development environment that easily integrates critical information and appears seamless to the end user as they traverse the portal
- Embedded collaboration across all of an organization’s enterprise applications, content and processes
- Reduced complexity of managing content, applications, infrastructure and standalone tools
The business and technology ROI factors cited above are meant to serve as guideposts; determining the success of an enterprise portal is unique to every organization and should be based on each company’s specific business needs.
During the planning phase and through the deployment (and beyond), each organization should look to these overarching factors to help measure the success of their enterprise portal and make adjustments accordingly.
Though success criteria may vary by organization, the three key factors in any enterprise portal’s success lie in the organization's ability to cut costs by streamlining access to information by employees, customers, and partners; reducing lengthy administrative tasks through customized automation of business processes; and use of a central repository of information that is the start and end point of each business day.
Many organizations have deployed an enterprise portal while others are still assessing its true value before they make the investment. These two distinct audiences are really three:
- Enterprises that have successfully deployed and continue to grow their portal
- Organizations that may have started a portal deployment but stopped at one of the earlier stages in the portal evolution and are faced with either its current or impending abandonment
- Enterprises that are still discussing the 2005 IT budget and trying to really "lift the hood" in order to determine the portal’s true value to the organization
Regardless of your company’s current portal status, the key to the portal’s success is in recognizing that it will continue to evolve based on organizational as well as industry-wide changes. While a portal will never be a self-sustaining IT tool, it will always be an extension of its users. The more it’s used, the more valuable it becomes.